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Determining marital standard of living in support cases

On Behalf of | Oct 14, 2021 | Alimony

Couples residing in New Jersey who are going through a divorce might need to negotiate alimony and child support payments. One of the steps involved before a fair agreement can be reached is to determine the marital standard of living. Once this is done, the parties will have a better idea of what each will need to maintain this standard of living after the split.

Analyzing the couple’s lifestyle

To create a full picture of a couple’s marital standard of living, an analysis of the couple’s lifestyle must be made. The focus of this analysis is the couple’s financial situation. A forensic accountant might be able to assist the couple in conducting this analysis, which can include:

  • A review of how marital expenses were paid
  • An organized document that lists all the expenses incurred by the couple, divided into categories
  • An identification for exclusion of all non-routine expenses
  • An average budget with monthly expenditures
  • A sample budget of each person’s expenses after the divorce is finalized, which also includes projected support payments

Dividing the assets and debts

During the negotiations for the divorce settlement, spouses will have to deal with the division of their assets, even as they negotiate the amount and the way alimony and child support will be paid. As part of this process, couples will review various types of assets, including:

  • Real estate property
  • Bank and investment and retirement accounts
  • Vehicles such as cars and boats
  • Employee benefits such as stocks
  • Debts such as mortgages and car loans

Tax implications can have an impact

As couples establish a marital standard of living and negotiate their divorce settlement including alimony payments, they should remember to explore the tax implications for all their decisions. Whether they are looking at the taxes selling the house will generate or at possible fees and penalties for early retirement withdrawals, taxes can significantly affect how couples negotiate.